Cutting corners could be a false economy

October 8th, 2008

As the financial crisis worsens the Government announced today a £50 billion bail out of the banking system, funded by us taxpayers. Apparently taxpayers have the potential to ‘earn a proper return’, whatever that may mean. There are also Government stipulations that banks must cap executive pay and shareholder dividends and commit to supporting lending to homebuyers and small business, as reported in The Independent today.

The Bank of England has also made the decision to cut interest rates from 5% to 4.5%. Some mortgage lenders were quick to pass this cut on to their customers through their variable rates.

Hopefully these changes will have the desired effect on the economy but we all need to continue to be stringent with our spending.

Remember, now is the best time to reevaluate your finances. Take more notice of what you are spending your money on, look for offers when you are shopping, don’t use your car for short journeys and make sure that you aren’t paying over the odds on your car insurance.

I read an article in The Independent that advises young drivers not to cut corners when purchasing car insurance. Due to the large premiums that new inexperienced drivers have to pay, they are often put on their parents car insurance policy as a named driver. However, what appears to be quite commonplace now is that young drivers are continuing to do this even through they in fact are the main driver. Especially when using a car at University. What many people don’t realise is that this is technically fraud and if the young driver was to have an accident their car insurance policy could be invalid.

Many insurance companies offer some good rates for young drivers. 100% online insurance company believe that it is unfair for all drivers to pay over the odds on their car insurance simply because of their age. They were also voted cheapest car insurance provider in 2008 by moneysupermarket.com, so visit their website and get a car insurance quote. By having your own car insurance you also build up your no claims discount which will mean that your insurance premium will come down if you don’t have an accident. So cutting corners is not always the best option.

Entry Filed under: Finances, advice, insurance